Biden Administration To Sell One Million Barrels Of Gas From Strategic Reserve

The Energy Department announced that it will sell one million barrels of gasoline from its Strategic Petroleum Reserve (SPR) to lower gasoline prices during the summer travel season.

After Congress ordered the sale of the gasoline reserve during a government funding bill that was approved in March, the Biden administration hopes that the liquidation of the 42 million gallons of gas will lower retail gasoline prices.

The Northeast Gasoline Supply Reserve was authorized in 2014, two years after Hurricane Sandy had damaged refineries and left terminals underwater, leaving some gas stations in New York without fuel for up to 30 days.

However, a 2022 Government Accountability Office report revealed that the reserve, which has been kept in commercial storage terminals in Maine and New Jersey, has never been used.

According to the Energy Department, maintaining and operating the reserve costs around $13 per barrel annually, compared to the significantly smaller 30 cents per barrel annual cost of maintaining crude oil stored in the Energy Department’s Strategic Petroleum Reserve.

With retail gasoline prices increasing around 15% this year, analysts predict it will only continue to rise during the busy summer travel season.

Energy Secretary Jennifer Granholm said in a statement, “By strategically releasing this reserve in between Memorial Day and July 4th, we are ensuring sufficient supply flows to the tri-state and northeast at a time hardworking Americans need it the most.”

Upon the Biden administration’s announcement of the sale, gasoline futures have dropped to a new season low of $2.4895.

However, despite the administration’s claims that the release of the reserve will reduce retail gasoline prices, experts have argued that one million barrels will make no significant difference in the price of gasoline on the East Coast, which burned over three million barrels of gasoline last June.

Rep. August Pfluger (R-Texas) and Rep. Kevin Hern (R-Oklahoma), chairmen of the House Energy Action Team, said in a statement Tuesday, “If the President truly wants to ease Americans’ pain at the pump, he should abandon his Green New Deal-style energy agenda and allow American producers to provide affordable, reliable and secure energy for our country and our allies.”

The Energy Department announced that bids on the gasoline reserve sale are due by 11 a.m. CST on May 28, and the fuel will be delivered no later than June 30.